Every decision we make at work or at home involves managing the balance between risk and opportunity. The key to effective decision making is to better understand the human side of it: The individual differences in how we interact with our environment and each other. There are a few things to consider when it comes to managing risk.
The Case for the Human Factor in Risk
A Financial Times research study in 2016 looked at the risk taking policies of different banks. They tracked senior bankers over 15 years as they moved from job to job, and found that risk taking policies were mainly determined by the people in charge of the bank, rather than any other measurable factors.
There is currently no standard unit of measurement for risk; For example there is no measurement that can be applied to the risk of an investment, the risk in different diets, and the risk of dangerous roads. The concept lacks coherence. To manage risk effectively, you need to be able to measure it in valid and reliable ways. Traditional approaches to risk management have been on attempting to objectively measure risk, but interestingly, the human side of risk is able to create quite a coherent and stable picture. Self-knowledge may be the key to getting to terms with the uncertainties around the complex concept of risk.
Team Homo Sapiens
Naturally, the eight different risk types will be evenly distributed among the population. For the survival of our species, we need a balance between those who are more cautious and alert to risk, with others who are more adventurous and willing to face danger more readily. Geoff Trickey, leading psychologist and author of the Risk Type Compass (RTC), calls this “Team Homo Sapiens.”
To succeed, a team needs an assortment of different skills or abilities. For example, a football team made up only of strikers or defenders won’t win, you need a mixture. There are no good or bad risk types, and each can make important contributions. This is one of the reasons the RTC is so useful for team development – its ability to improve communication and cohesion by creating a clear and consensual understanding of individual differences.
RTC for Successful Team Development
A Senior Risk Management Team recently had great success in using the RTC to address conflict and ineffective communication following a restructuring. They used the RTC to give them an awareness of the different viewpoints and approaches to decision making, which enhanced their ability to communicate and innovate. They gained an understanding of their own biases and were able to respect the needs of others in decision making.
It may be possible to avoid problems of this nature by recruiting a dynamic team. A major tech company used the RTC when selecting a new Research and Development team, and it proved to be valuable for informing them who was suited to the role, and ensuring sufficient diversity within the new team.
If you’re interested in improving your personal relationships and professional performance, join us for a complimentary Risk Type group feedback session in the IMI in Sandyford on 13th November 2018.
We’ll take you through what your Personal Risk Type Report can tell you about how you tend to behave towards others, and how you want others to behave towards you.
Places are limited so contact us at firstname.lastname@example.org or call 012788727 for more information or to reserve your place.